Enterprise storage could remain one of the last bastions of high-margin distribution, making it all the more competitive.
Storage vendor Veritas last week announced it has appointed Express Data as its fourth distributor in Australia.
The move has pitched ED and recently appointed direct distributor Tech Pacific against the smaller, specialist storage operations of Veritas' two other distributors, ACA Pacific and Agate.
Adding fuel to the fire, Veritas' new national distribution manager, Nick Blozan, has admitted four distributors may be one too many and will evaluate each company over the next quarter to establish which three can demonstrate the ability to grow the market.
`To be candid, we were very open and told them they were in a dogfight for our business,' he said.
And it seems Veritas, one of IT's quiet achievers, is worth the fight. The company is riding a wave of success on NASDAQ with an estimated market capitalisation of $US32.4 billion. The company achieved $US210 million in revenues for the 1998/99 financial year. This year's figures will not be available until late this week.
An additional caveat is Veritas does not set a distributor's sell price, which allows them to achieve higher margins and maintain the product's attractiveness in the channel.
Increasingly healthy sales of Veritas' UNIX and NT-based enterprise storage systems also leave the door wide open for reseller opportunities, particularly its specialist VARs.
However, the impending competition has seen the four distributors express concern that a price war may erupt in the channel.
But Blozan claims each company will be evaluated according to their success in growing the total market over the next quarter, rather than steal competitive market share.
Long-term partner ACA Pacific has been instrumental in building the vendor's Australian market.
However, Blozan admitted the company had been concerned about ACA Pacific's performance but is now satisfied with its technical skills. `At one point they were going to become a liability to us because of their [limited] size,' he said.
When asked about Agate, he said: `The question is will they really step up? It's very much up to them to deliver what's expected.'
Meanwhile, Tech Pacific and Express Data have found favour due to their broad reseller reach. `They give us the ability to energise this vast army of resellers,' he said.
Blozan's decisions come after he took up his position in November after moving here from the US to reorganise the channel with his colleague, distribution manager Charlotte Overman.